Oh my gosh. The end of your three days, but hey. It’s the begin­ning of mine. I was try­ing to think of the eas­i­est way to say this. And the eas­i­est way is to tell you about the morn­ing I saw on the cov­er of The New York Times, I saw… Well, it was actu­al­ly The Wall Street Journal. I saw the face of a friend of mine, Evan Williams, founder of Twitter, on the morn­ing of his IPO. And he had the num­ber $4.3 bil­lion under his face. Which was the amount of mon­ey he had earned that day, that morn­ing. And I thought to myself, this guy’s fucked.

And it was a strange­ly mixed feel­ing. All my feel­ings these days are very mixed. I was hap­py for him on the one hand. Here’s the kid who who start­ed Blogger and you know, bor­rowed two hun­dred dol­lars from him, and three hun­dred dol­lars from her, to get this thing going, and dis­rupt­ed jour­nal­ism, and start­ed Twitter. And he’s a good guy, and he wants to give mon­ey the Iowa corn farm­ers, where he’s from.

But at the same time, I real­ized now that he had tak­en in all of this mon­ey, he was going to have to do some­thing impos­si­ble with this com­pa­ny. He was going to have to some­how find 100×, 1,000× returns from a 140-character mes­sag­ing app. And Twitter, unlike some oth­er things like Facebook, I think Twitter’s cool. I think Twitter’s actu­al­ly a good, light, app. And Twitter now makes $500 mil­lion a quar­ter. Which is $2 bil­lion a year. I mean, imag­ine going to your mom and say­ing, ​“I made an app. It deliv­ers 140-character mes­sages, and I make $2 bil­lion a year on it.

Mom would think that’s real­ly cool. Yay! A win, right? A win. $2 bil­lion, a win! But $2 bil­lion a year is con­sid­ered an abject fail­ure by Wall Street. Because it turns out $2 bil­lion is about all you can make off a 140-character mes­sag­ing app. That’s about…it. Two bil­lion.

Now you would think $2 bil­lion dol­lars, 140 char—this is good. This is a good, sus­tain­able busi­ness. This would work, right? But the prob­lem as far as Wall Street’s con­cerned is you can’t stop… There’s no such thing as enough. The only way to make mon­ey in the debt struc­ture, in the busi­ness plan that they adopt­ed that morn­ing, is to grow. Is to grow—not just grow, but to some­how try to grow expo­nen­tial­ly. To go from two bil­lion to five bil­lion to twelve bil­lion to thir­ty bil­lion. So even if the expo­nen­tial growth curve starts to lev­el off into a geo­met­ric one, that’s fail­ure.

So, the impos­si­bil­i­ty of being able to do this is not an aber­ra­tion. This is busi­ness as usu­al. And this is what’s destroy­ing not just the dig­i­tal econ­o­my, but it’s destroy­ing the whole thing. It’s destroy­ing our world. Not just our joy and our time and our liveli­hood, but that plan­et itself. The beau­ty of dig­i­tal tech­nol­o­gy, equal to its tragedy, the tragedy is it accel­er­ates and ampli­fies all of the prob­lems of cor­po­rate cap­i­tal­ism, to the point where we’re just suck­ing every­thing out.

The beau­ty of it is it makes all of this vis­i­ble. It actu­al­ly makes it trans­par­ent. We can see what’s going on for the first time. We know, now I think, not just from that but thanks to Mike Judge and Silicon Valley, we know that when you are on the floor of the stock exchange, get­ting to ring the bell on the morn­ing of your IPO and get­ting applaud­ed by all the stock bro­kers and invest­ment bankers around you, it’s not because you’ve done some­thing dis­rup­tive. They’re applaud­ing you and let­ting you ring the bell because you’ve con­firmed the pri­ma­cy of cor­po­rate cap­i­tal to the whole equa­tion.

So yeah, you can go dis­rupt jour­nal­ism with Blogger, and dis­rupt com­mu­ni­ca­tions tech­nol­o­gy with Twitter, but final­ly, when it comes to the under­ly­ing oper­at­ing sys­tem, oh no, don’t dis­rupt that. What do the dis­rup­tors do the minute some­one notices them? Is you run to dad­dy at Goldman Sachs and you sur­ren­der all that dis­rup­tion to the biggest, bad­dest indus­try. The one most in need of dis­rup­tion, of all.

And the part that’s con­fus­ing to me, that’s iron­ic to me, is that pro­gram­mers, devel­op­ers, peo­ple who have engaged with oper­at­ing sys­tems, are igno­rant of the fact that they’re run­ning their busi­ness­es on top of anoth­er oper­at­ing sys­tem that was pro­grammed by peo­ple in a par­tic­u­lar moment of his­to­ry to opti­mize cer­tain things. And it’s not opti­miz­ing what we just heard about, the con­nec­tion of peo­ple, and cre­ation and exchange of val­ue for humans, and making—I mean, all that stuff. That’s not what it’s opti­mized for. It’s opti­mized for the extrac­tion of val­ue from peo­ple and places, and its con­ver­sion into share price.

That’s the whole game. You don’t cre­ate a com­pa­ny in order for the com­pa­ny to have rev­enue. You cre­ate the com­pa­ny in order to sell it. They’re play­ing Flip This Company. And the last rung, in this case the the peo­ple who bought Twitter shares on its IPO day, they’re the bot­tom lev­el of the pyra­mid. And oh, they they can’t flip it. There’s no one else going to buy it now, because it’s lev­eled out.

So the real busi­ness plan (Well, this is con­sid­ered the crap­py, shit­ty, real busi­ness plan.) of sell­ing this busi­ness again and again and again, Flip This Business, stopped work­ing. It’s the same thing that led to the hous­ing cri­sis. People were financ­ing their hous­es by refi­nanc­ing the hous­es. And they refi­nanced them at high­er val­u­a­tions. As long as you had high­er val­u­a­tions, you could refi­nance in a way where you owned more of the house. But when it stops going up, you can’t refi­nance it any­more. It’s the same thing that hap­pened to Twitter, same thing that hap­pens to almost any busi­ness. So we end up opti­miz­ing our busi­ness­es not to cre­ate sus­tain­able mar­ket­places, not to do busi­ness. We’re opti­miz­ing our busi­ness­es for extrac­tion in sales.

And this is why—I mean, we’re talk­ing about the Google bus… This is why the peo­ple of San Francisco are so mad. And I’m sure it’s hap­pened here to some extent. When Silicon Valley firms moved in and every­body— Nobody wants to live down in Menlo Park or Mountain View. They won’t want to live off the high­way. They want to live in San Francisco. It’s like a Hollywood set. You’ve got all the rad­i­cals, the Grateful Dead peo­ple. You’re going to move there and then dri­ve down and work at a com­pa­ny as a devel­op­er.

And mean­ing well, I sup­pose, Google cre­at­ed these bus­es so peo­ple don’t have to dri­ve, and there’s less pol­lu­tion, and you get to (“get to”) work on your way to work, and work on your way home. Because you have WiFi and air con­di­tion­ing and all that. And, as all these peo­ple moved to say Francisco, as we know, San Francisco rent dou­bled, then tripled. And then they found out if you live near one of the Google bus stops, your rent was 30% high­er than it was if you didn’t even live there.

So peo­ple look at these bus­es com­ing back and forth like an alien inva­sion, like V or that that episode of The Twilight Zone, ​“To Serve Man” where they’re just cart­ing the peo­ple back and forth. That these are the peo­ple com­ing, chang­ing their neigh­bor­hood, rais­ing their rents, mak­ing local busi­ness­es have to leave. And then peo­ple have to actu­al­ly leave. They’re evict­ed from San Francisco. They can’t afford to live there.

So instead of just pro­vid­ing the back­drop, these peo­ple now, their city…which isn’t…go: it’s not San Francisco any­more. It’s…I used to go to San Francisco from New York to get almost that spir­i­tu­al recharge? Now I go and I bring a spir­i­tu­al recharge there, and I’m from New York, of all places. Wall Street looks like Burning Man or some­thing com­pared to the rapa­cious ven­ture cap­i­tal­ism of San Francisco.

So, the peo­ple there, I get it. They get mad and they lay down in front of the bus­es, and…trying to make both the com­pa­ny and gov­ern­ment aware of what’s going on. But when the frus­tra­tion bub­bles over as it did in Oakland, peo­ple start­ed throw­ing rocks at the Google bus. And I start­ed to get these tweets that morn­ing from peo­ple say­ing, ​“Oh, retweet, this is great. It’s hap­pen­ing. It’s hap­pen­ing!” Like some­how this is Occupy. Like this is a good thing and we should all get behind— You know, Ed Snowden, the NSA, and Google, and Schmidt, and yeah!

And I thought about Howard Rheingold’s daugh­ter. You know Howard Rheingold, a great ear­ly Internet pio­neer. His daugh­ter worked at Google at the time and was on these bus­es. I don’t want them to throw rocks at her. Or the devel­op­er. The peo­ple that are work­ing at Google, do they deserve rocks thrown at them? I mean, they’re just try­ing to— What’s the aver­age lifes­pan of a Google work­er? Three or four years before they burn out? They’re just try­ing to make a hun­dred grand a year so they get to what? three or four hun­dred. If they’re pay­ing rent, then they’re only going to end up with $30 thou­sand at the end, any­way, which they can’t retire on, or even afford the psy­chother­a­py that they’re going to need after that. They’re not on COBRA any­more. Do they still have—? They must still have COBRA. We’re all on COBRA! ObamaCOBRA.

I can’t blame them. So okay, we can blame the CEO, who’s push­ing them to do this, right. Because the CEO just wants them to work hard­er, and extract val­ue and all. But who’s he answer­ing to? The CEO is answer­ing to the share­hold­ers. And who are the share­hold­ers? Shareholders, there’s a lot of us in this room, with our S&P 500 Index Fund in our retire­ment plan. Or there’s some of the very same peo­ple who were lying down in front of the bus, who are depend­ing on that stock to go up as a cap­i­tal gain. And if it doesn’t, it’s going to get boot­ed from the fund.

So, Google just has to grow. It has to keep grow­ing. But Google grows at its own per­il. Google grew so much that what hap­pened? It out­grew Google. Google had to become what? Alphabet. Now what is Alphabet? Alphabet is not Google. Alphabet is a hold­ing com­pa­ny. So Google’s new busi­ness as Alphabet is to do what? It’s to buy and sell tech­nol­o­gy com­pa­nies. So, once a com­pa­ny becomes just too big to flip any­more, it becomes a flip­per of oth­er com­pa­nies. Oh, I’ll buy this robot­ics com­pa­ny, and I’ll sell this one and buy this one and sell that one. So its own inno­va­tion is gone. It’s like any of the big phar­ma com­pa­nies. They don’t inno­vate drugs at big phar­ma com­pa­nies. They scout small drug com­pa­nies who have immi­nent inno­va­tions, immi­nent releas­es, and they quick­ly buy them. And that’s where their inno­va­tion actu­al­ly comes from.

The fun­ny thing is peo­ple think I’m rail­ing out against busi­ness, here. I’m not rail­ing out against busi­ness. I’m actu­al­ly mak­ing a busi­ness argu­ment. This is bad busi­ness. This is some meta-business that they’re involved in. The buy­ing and sell­ing com­pa­nies, this is the finan­cial­iza­tion of busi­ness. The way they should do busi­ness is you make a prod­uct, and then you sell that prod­uct for a lit­tle bit more than it cost you. And then that prof­it, you get to keep that, or buy oth­er stuff. Or do a ser­vice and get paid for it. That’s the way busi­ness can work. There’s a ton of great, great sus­tain­able dig­i­tal busi­ness­es.

But the minute we take mon­ey, the minute we take mon­ey from angels, much less Silicon Valley or ven­ture cap­i­tal­ists… The minute you take mon­ey, what do they ask you to do? They ask you to piv­ot. Now what does piv­ot­ing mean? We are told that piv­ot­ing means to move towards more prof­itable out­comes, bet­ter busi­ness plans. No. Pivoting means aban­don what­ev­er it was you were orig­i­nal­ly going to do with your busi­ness or tech­nol­o­gy, and instead flip your busi­ness with[in] twelve to eigh­teen months for a hun­dred times what they paid for it. That’s the object of the game.

So I want­ed to fig­ure out what is the oper­at­ing sys­tem that demands this? Why doesn’t any­body rec­og­nize what’s going on? And then how do we get out of that. And I think I’ve actu­al­ly fig­ured it out. I mean, it goes way back. The way to under­stand any medi­um well, if there’s actu­al medi­um there, is to fig­ure out who made this medi­um, why did they make it, and what are the val­ues that are embed­ded in it?

So I need­ed to go back in there— Okay, where did this cor­po­rate idea come from? Where did cen­tral cur­ren­cy come from? Central cur­ren­cy, I see it as kind of the oper­at­ing sys­tem of cor­po­rate cap­i­tal­ism, and cor­po­ra­tions are the soft­ware that was designed to run on it. So, Twitter is a dig­i­tal com­pa­ny, but it’s real­ly the same thing. Or Amazon or Uber. They’re run­ning the same under­ly­ing code. It’s just so embed­ded it’s accept­ed as if it’s a con­di­tion of nature, rather than an oper­at­ing sys­tem. It’s as if you woke up in the world where there were only Macintosh com­put­ers. You would not know there’s such a thing as an oper­at­ing sys­tem. You would think that’s just ​“com­put­er.” So if you wake up in a world where the way you do things is you come up with an idea in your dorm room, and if it’s a good enough one you go to these guys and get mon­ey, and then you blah blah blah blah, and get to IPO, and yay one bil­lion… Then you think that’s it. You don’t under­stand that there may be oth­er ways of doing busi­ness. And there were.

So I had to go all the way back. And I went all the way back to the late Middle Ages. This is the one good things about hav­ing gone aca­d­e­m­ic, is you can get just a lit­tle bit of extra time to unearth things that peo­ple don’t real­ly know about. And what I found out was, back in late Medieval times, right when the sol­diers were com­ing back from the Crusades, there was this weird peer-to-peer moment that hap­pened, and was quite was quick­ly snuffed. But what hap­pened was these guys they went out to the Crusades—it wasn’t a good trip at all—but when they came back, they had opened up all these trade routes with oth­er coun­tries. And they had brought back all dif­fer­ent tech­nolo­gies and ways of doing things from large­ly Arab nations, or Arab ter­ri­to­ries.

And one of the things they brought back was what was called the bazaar. And the bazaar was—in Western Europe, they called it the mar­ket­place. And it was real­ly just a way for peo­ple to bring all their goods togeth­er for a day, and peo­ple would trade. They’d buy and sell things from one anoth­er. And it had a lot of inno­va­tions in it. The kind of mon­ey they used. They had very dif­fer­ent mon­ey from tra­di­tion­al, long dis­tance gold coin. You couldn’t use gold coin in a bazaar or or mar­ket­place. It was too valu­able. If you had gold coin, you’re just going to save it.

So they need­ed a way to pro­mote the veloc­i­ty of exchanges, a way to prime the pump in the mar­ket­place and get the trade going. So they came up with mar­ket monies that were only good for a day. They had grain-based cur­ren­cy, where you’d bring grain to a grain store and get grain receipts that you would then…little per­fo­rat­ed alu­minum foil grain receipts that you’d hand out to peo­ple. All these kinds of mon­ey that were opti­mized not for sav­ings. These are monies that might only be good for one day. Or like a grain cur­ren­cy, would lose val­ue over time because the grain store had to be paid, and rats might eat some of the grain. So your ten pounds of grain, in a month might only be worth nine pounds of grain, or eight pounds of grain. So all of these monies were were opti­mized— If you think of them pro­gram­mat­i­cal­ly, they were opti­mized for exchange. Get rid of it. Keep it mov­ing.

The oth­er a beau­ty, real­ly, of the bazaar was that it was a peer-to-peer mar­ket­place. And these are peo­ple who had been depen­dent on feu­dal lords for cen­turies. And now they were actu­al­ly trad­ing with one anoth­er. And there was this tremen­dous expan­sion in growth. It was the biggest, well-distributed era of growth we’ve ever seen his­tor­i­cal­ly. They got so wealthy. And they didn’t real­ly have sav­ings vehi­cles, so they built cathe­drals. If you ever look at any these books on the age of cathe­drals, the cathe­drals weren’t built in the Renaissance. They were built in the Late Medieval peri­od, when there was so much wealth that they want­ed a way to invest in the future. So in their town like, how can we pre­serve this wealth? They would build a cathe­dral, so that future gen­er­a­tions would have a tourist attrac­tion, a pil­grim­age site for peo­ple to come and cre­ate val­ue.

So it wasn’t a great time to be alive, even though women were taller in Late Medieval England than at any time until the 1970s, because they only worked three or four days a week and they had lots of food, but it wasn’t nec­es­sar­i­ly great. I mean, there were no iPhones, right? There was no TV there. There was no House of Cards and no Netflix. There was no antibi­otics. I’m not say­ing joy, joy. You could get whacked in the head real­ly eas­i­ly and die. Game of Thrones kind of stuff. But, there was a grow­ing peer-to-peer econ­o­my. That’s the point here.

And the prob­lem with a grow­ing peer-to-peer econ­o­my, with the rise of the peas­ant class to be a mid­dle class, is what does that do to the aris­to­crats, to the upper class? Freaked them out. Because now the aris­toc­ra­cy was get­ting rel­a­tive­ly poor­er, as the poor peo­ple got wealth­i­er. And that’s when they came up with the oper­at­ing sys­tem that plagues us to this day. They came up with two inno­va­tions.

One was the char­tered monop­oly, what we now call the cor­po­ra­tion. The char­tered monop­oly was a way of say­ing that you’re not allowed to all do busi­ness in these—you can’t have your small busi­ness. The king is going his one friend. So, I’m going to pick Brad, because he’s my friend. He’s pow­er­ful. So, for let’s say, shoe­mak­ing, Brad is his majesty’s roy­al shoe­mak­er. And if you were a shoe­mak­er, now instead of mak­ing shoes, bring­ing them to mar­ket and trad­ing them, now you’ve got to be an employ­ee of Brad. Or we’ll kill you. And Brad, you’ll give me 5% of the com­pa­ny for this priv­i­lege. You’re nev­er going to have to com­pete again. It’s all good. So as a monarch, I would give shoe­mak­ing to Brad. I’d give the East Indies to his wife. I’ll give the West Indies to this one. So, all the indus­tries get divvied out to my friends, I get a per­cent­age of it.

So now, instead of mak­ing shoes, instead of cre­at­ing val­ue and exchang­ing the val­ue I’ve cre­at­ed, now I work three hours for Brad. This is when wage labor was born. This is when employ­ment was born. Whenever I hear Obama or some­one say, ​“We’ve got to cre­ate more jobs, cre­ate more jobs…” Jobs are oppres­sion. Jobs are inac­tive oppres­sion. We didn’t have jobs before. We made stuff. Having a job means that he’s the only one who’s allowed to extract val­ue from what’s hap­pen­ing, and I’m work­ing for him. That’s when we put the clock up on the church tow­er in the Medieval towns, because now every­thing was about time. I’m sell­ing my time, rather than sell­ing the val­ue I cre­ate.

And the sec­ond great inno­va­tion they came up with was cen­tral cur­ren­cy. They made all these local peer-to-peer cur­ren­cies ille­gal; all these lit­tle let sys­tems, and time dol­lars, and things that peo­ple had, and cre­at­ed cen­tral cur­ren­cy, which is mon­ey that helps the wealthy. Central cur­ren­cy means you’re not allowed to exchange val­ue, you’re not allowed to even buy shoes from Brad, unless you bor­row mon­ey from the cen­tral trea­sury, at inter­est. So, peo­ple with mon­ey could make mon­ey sim­ply by hav­ing mon­ey. Which is the object of the game. How do the rich get rich by being rich? Not by cre­at­ing val­ue, but by monop­o­liz­ing val­ue exchange.

Now, the oth­er thing that they didn’t real­ly real­ize, I don’t think con­scious­ly, is when you build a mon­ey sys­tem that’s based in inter­est, it requires growth. If you’re going to pay back more mon­ey than you bor­rowed, where does that oth­er mon­ey come from? Either you take it from some­one else who goes bank­rupt, or things grow.

Now this was great for the colo­nial pow­ers of Western Europe, because they get to grow now. They have to grow. They have a growth man­date. So they go to South America, and Africa, and America, and you enslave dark peo­ple and take all their stuff, and ruin their coun­tries. You extract.

So the object of the game here now is to extract val­ue from places, extract val­ue from your peo­ple, from your employ­ees. And any­time any­body else seems to be cre­at­ing or exchang­ing val­ue, like in the West Indies when the Dutch East India Company real­ized that the natives there were mak­ing rope and sell­ing it to the cor­po­ra­tion? They made a law and they said it’s ille­gal for peo­ple on this island to make rope. Instead, you have to be an employ­ee of the Dutch East India Trading Company’s rope-making sub­sidiary. No one’s allowed to cre­ate and exchange val­ue.

So, you take that and fast for­ward to today, we’re in the same ridicu­lous mind­set about how to gen­er­ate wealth. About how to do busi­ness. So you take a com­pa­ny like Amazon, say. Does Amazon look at the book indus­try and say, ​“Oh, we want to help read­ers and writ­ers con­nect with one anoth­er. We want to help authors cre­ate val­ue and real­ly retain more val­ue. We want to help pub­lish­ers dis­cov­er new tal­ent, and real­ly just raise the lev­el of dis­course, and help—” No. They looked at the book indus­try because the book indus­try was the lowest-hanging fruit.

I was a writer before Amazon. Believe me, the book indus­try was hob­bling along as best it—we got by some­how? Fudged a lit­tle here, and fudged a lit­tle there. But it was cer­tain­ly not a growth indus­try. It was a sus­tain­able, slight­ly shrink­ing indus­try. People were play­ing video games already and read­ing less books. No, they picked the book indus­try because they want­ed to estab­lish a monop­oly in books.

And once they were able to (and it was pret­ty easy to estab­lish a monop­oly in books by dis­rupt­ing all of our inef­fi­cien­cies, our blessed lit­tle inef­fi­cien­cies) by dis­rupt­ing all those and cre­at­ing a more effi­cient mar­ket­place. They take over books for what rea­son? To move over into anoth­er ver­ti­cal. The only rea­son you estab­lish a monop­oly in one ver­ti­cal is so you can pop over into anoth­er ver­ti­cal. Another retail indus­try, and anoth­er region­al indus­try. Then you go into it cloud ser­vices. And then some­thing else. But each one has to be total. And you adopt a scorched earth pol­i­cy toward your mar­ket.

It’s two very dif­fer­ent things. If you want to take over a mar­ket, then you don’t have to wor­ry about is that mar­ket sus­tain­able? Is that mar­ket going to stay around? Are these peo­ple going to do okay? It doesn’t mat­ter. And I’m not talk­ing about being gen­er­ous, I’m talk­ing about do you need to be able to make rev­enue in that mar­ket long term? No, if that mar­ket is only a step­ping stone to some­thing else.

So when Amazon looks at books, it doesn’t mat­ter if that’s not prof­itable. They sell books, very often, for below cost. Because it doesn’t have any­thing to do with mak­ing mon­ey on books. Or you look Uber. And I know a lot of you like Uber, and it’s helped you get to places or from air­ports, and taxis are bad, and what­ev­er. Fine. But Uber’s view of the ride-sharing mar­ket­place— Uber’s not think­ing, ​“How are we going to cre­ate a sus­tain­able taxi cul­ture? How are we going to keep these dri­vers alive for the long term?” Because they don’t need to. They just need to estab­lish a monop­oly in ride-sharing (or what­ev­er, ​“ride-sharing,” let’s just pre­tend that it is) so they can lever­age that monop­oly into the next thing, whether it’s drones or robot­ic cars. And the dri­vers won’t par­tic­i­pate in that. The places don’t par­tic­i­pate in that.

No, the object of the game, real­ly from the begin­ning of the indus­tri­al age, was to remove humans from the equa­tion. That’s where the first dig­i­tal tech­nol­o­gy that most of us inter­act­ed with was—remember when they replaced the recep­tion­ist at every com­pa­ny with one of those lit­tle auto­mat­ic answer­ing com­put­ers? You know, press one for this and press two for that. And the first time you encoun­tered one of those, you prob­a­bly real­ized right away, ​“This is tak­ing me more time than hav­ing a human.” It saved the com­pa­ny mon­ey, in the short term at least, because they could fire their round-the-clock recep­tion­ists. But for every­body who’s call­ing the com­pa­ny, it’s tak­ing you more time and ener­gy to get through this whole menu sys­tem.

So, it’s ulti­mate­ly cost­ing the entire…the entire mar­ket­place is spend­ing more time. It’s less effi­cient for the mar­ket­place. But that inefficiency’s been exter­nal­ized from the one com­pa­ny to every­body else. So what does every­body else do? Everybody else has got to put in one of those things, too. So now every­body is call­ing auto­mat­ic answer­ing machines, but everybody’s actu­al­ly spend­ing more time and ener­gy in doing it. And this is because the idea is sim­ply for each com­pa­ny to exter­nal­ize as much of its human costs as pos­si­ble.

And as design­ers, I think what I’m pos­ing to you is whether we can design in a way that’s look­ing not just at the user/customer of our prod­uct, but at the unac­knowl­edged exter­nal­ized labor, and ulti­mate­ly envi­ron­men­tal impact of the things that we’re doing. In oth­er words, when you’re mak­ing Uber, you’re think­ing of mak­ing it easy for the Uber user, not about help­ing the Uber dri­ver form sol­i­dar­i­ty with oth­er dri— There’s no chat func­tion. ​“Hey, how’re you doing? Do you want to go on strike?” There’s none of that. You’re think­ing how’re we going to make it you easy for this one side of it.

And what it comes down to is the basic eco­nom­ic prin­ci­ple that there are three fac­tors of pro­duc­tion in busi­ness. This is old­er than Adam Smith. There’s land, there’s labor, and there’s cap­i­tal. Land is like the land you grow the food on. The town that whose roads you’re using for your Uber cars. It’s all that place stuff, land. Labor is the peo­ple that are actu­al­ly work­ing. And cap­i­tal is the mon­ey you bring in, the invest­ment to start the busi­ness. Land, labor, and cap­i­tal.

Right now, the dig­i­tal econ­o­my is dri­ven sole­ly by cap­i­tal. The peo­ple who bring in the mon­ey get to make the deci­sions. That’s insane. And we accept it. Well, sure, yeah, they brought the mon­ey. They brought 1/3rd of the equa­tion. Yeah, they have a seat at the table. If we need to be cap­i­tal­ized, which most of us real­ly don’t need to be cap­i­tal­ized to that extent. But even if they bring the mon­ey, fine. But what about the land and labor? If you for­get about the land and the labor, you end up with a dis­en­fran­chised work­force: check. And you end up with a destroyed envi­ron­ment: check. You can’t exter­nal­ize the cost to the world and its peo­ple, all for this num­ber. All for this met­ric which doesn’t actu­al­ly do any­thing for any­body. Fifty-seven peo­ple own half the world’s wealth. That’s nuts. That’s nuts.

And this is the good part: it’s bad for busi­ness. And they know it. They know it. Deloitte is this big account­ing firm. They came out with some­thing called The Shift Index in 2011. And what they did was research on cor­po­rate prof­it over size, over the last seventy-five years. And they found out that cor­po­rate prof­it over size, over cor­po­rate size, has been going down for seventy-five years. That is, cor­po­ra­tions are real­ly good at tak­ing all the mon­ey off the table, but they’re real­ly bad at deploy­ing those assets once they have it. It’s a form of finan­cial obe­si­ty, where they absorb all the mon­ey and they stored in fat, but not in mus­cle. And that’s actu­al­ly almost an insult to to gen­uine­ly obese peo­ple. I shouldn’t even use the metaphor, because cor­po­ra­tions are not human.

But the idea is they’ve got­ten so big that they they’re sit­ting on cash. So their func­tion now is more like a vac­u­um clean­er on eco­nom­ic regions. This is why Walmart will move into a region, they’ll oper­ate there for twen­ty or thir­ty years, and even­tu­al­ly the region goes bank­rupt. That’s because they use their mas­sive war chest to under­cut the prices of all the local busi­ness­es, so they go out out of busi­ness, no one can find work any­where except the Walmart. Which gives Walmart lever­age to hire every­body part-time and give nobody ben­e­fits, although Walmart will teach peo­ple how to apply for pub­lic services—because it’s their employ­ees. How to get wel­fare, how to get Medicare, how to get all this pub­lic— So that the net effect of a Walmart oper­at­ing on the com­mu­ni­ty is neg­a­tive. It’s not just extract­ing mon­ey in terms of con­sump­tion, but it’s exter­nal­iz­ing costs that peo­ple used to get from their jobs, now to the gov­ern­ment, to social ser­vices.

And they can do it for twen­ty or thir­ty years until the place goes bust. And now Walmart, this is their prob­lem, they’re hav­ing to close Walmarts, and they’ll move it to anoth­er region that still has a lit­tle bit of eco­nom­ic activ­i­ty. Now, that’s not a good long-term busi­ness strat­e­gy. If you bank­rupt the peo­ple you’re work­ing with or that you want to be your con­sumers, they have no mon­ey to spend with you. So you’re sit­ting there, ​“I’ve got all this mon­ey… But I don’t have a busi­ness.”

And then we get to now, and we think, well… And this was actu­al­ly around Eisenhower’s time. Have you guys read like, Vannevar Bush and these folks? Eisenhower real­ized that we had reached the end of cor­po­rate expan­sion. Because World War II hap­pened, all the lit­tle colo­nial peo­ples pushed back, ​“You can’t enslave our peo­ple any­more and just take all our stuff,” and except for a few banana repub­lic pub­lic rela­tions coups, these places pushed back. So, Eisenhower real­ized, ​“Well, shit. What’re we going to do? I’ve got to grow this econ­o­my.”

Vannevar Bush and the com­put­er folks from World War II, the peo­ple who did the cryp­tog­ra­phy and all, who want­ed there to be a rea­son to keep devel­op­ing com­put­ing and dig­i­tal tech­nol­o­gy, said, ​“Don’t wor­ry Ike. Computing will cre­ate a kind of a new vir­tu­al sur­face area on which we can expand. Technology will cre­ate regions, new ter­ri­to­ries, that don’t exist in the phys­i­cal world.” I mean, it just so hap­pens those ter­ri­to­ries are human atten­tion. Instead of col­o­niz­ing space, they col­o­nized our time. Which is where we’re liv­ing now. And that was my whole sort of Present Shock thing, was about that we live in this state of per­pet­u­al emer­gency inter­rup­tion, where things are going vibrate at you every time some­body sneezes. And you live in this awful state that only 911 oper­a­tors used to have to endure. You know, of a con­stant emer­gency, ​“Oh my God. Oh my God. Oh my God.”

It used to be that the only time some­one would break in on a phone call (this is when phones had wires) was like, grandma’s dying or some­thing. And the oper­a­tor would break in and say, ​“Oh, this is an emer­gency call.” Now your body’s like, vibrat­ing. Grandma’s dying, grandma’s dying, grandma’s dying. She’s not dying, some­one popped a zit on Twitter, you know, or some­body said some­thing.

But the dig­i­tal fix now, the idea here—and banks actu­al­ly believe this will work—is well, dig­i­tal tech­nol­o­gy will take tra­di­tion­al extrac­tive cor­po­rate cap­i­tal­ism, and just put it on steroids. It’ll just make it hap­pen more. And on on some lev­el, that’s true. So instead of hav­ing human traders on Wall Street, we have algo­rithms. Or we have algo­rithms trad­ing deriv­a­tives. Or deriv­a­tives of deriv­a­tives. And all deriv­a­tives are tak­ing, you know, time com­pres­sion. Now you can buy the stock, instead of buy­ing it today, you’re today buy­ing it nine­ty days from now, so that you can get the nine­ty days of…if the stock went up or down, you can get that nine­ty day delta squished into one day. Or now you get a deriv­a­tive of that and squish all that in a deriv­a­tive of that and squish all that in.

And the deriv­a­tives exchange, the steroidal, ultra­fast, algo­rith­mic deriv­a­tives exchange got so big and so pow­er­ful— Do you know, the New York Stock Exchange was pur­chased by its deriv­a­tives exchange? That is, the New York Stock Exchange was eat­en by its own abstrac­tion. And the New York Stock Exchange was already an abstrac­tion, of the actu­al mar­ket­place of where peo­ple are doing things. So it’s no won­der that cap­i­tal gains—is real­ly what we’re talk­ing about—is the only way any­body in busi­ness thinks of mak­ing mon­ey. Because it’s got all of this com­pressed activ­i­ty. That’s the only way to get to these 100×, 1,000×, 1,000,000,000× returns.

And too many of us still keep the eye on the prize of Zuckerberg, and would rather sur­ren­der a high prob­a­bil­i­ty of becom­ing a mil­lion­aire on your com­pa­ny to the tiny prob­a­bil­i­ty of becom­ing a bil­lion­aire on some uni­corn. Which is sad, you know. It reminds me—and I go to San Francisco and even though these peo­ple wear­ing real­ly good clothes, what I see is the same scene as in New York, when peo­ple are tak­ing their wel­fare check and going to the cor­ner bode­ga and buy­ing lot­tery tick­ets. And you just want to slap them, and say, ​“What the hell, you know?” And they have extra mon­ey and they buy cig­a­rettes. It’s like what the hell are you doing? Because there’s no chance. There’s no chance that all of these great com­pa­nies, always—they go away.

The oth­er prob­lem with the steroidal dig­i­tal fix of this econ­o­my is we end up with pow­er law dynam­ics, which we all know about. You know, even though we have all this more access to music pro­duc­tion or dis­tri­b­u­tion, there’s like one or two Taylor Swifts on the top and a zil­lion peo­ple on the wrong end of the Long Tail. Increased access did not lead to increased val­ue cre­ation and exchange. It’s because of all the ways that the plat­forms that we’re build­ing rein­force pow­er law dynam­ics. Because if you rein­force pow­er law dynam­ics again, you’re more con­so­nant— I mean, it’s a longer argu­ment. You can read about it. But you’re more con­so­nant with the extrac­tive nature of cor­po­rate cap­i­tal­ism than you are if you cre­ate a mar­ket­place of exchange, where the val­ue is going to be dis­trib­uted amongst a whole lot of peo­ple.

I mean, we all know. We’re liv­ing in a dig­i­tal econ­o­my where the way to make mon­ey is on suc­ces­sive rounds of stock sales, rather than cre­at­ing rev­enue. And when you do that, and when you extract so much mon­ey from peo­ple and places that they have none left, and you still have to extract from them, you get to where we are now. So now we know, we can’t get mon­ey from peo­ple any­more. They’re broke. They don’t have any. So what do we get? We’re going to get data from them.

And that’s the Facebook idea. Or even the Twitter one. People don’t have mon­ey, we’ll get data. We’re all going to extract data. Read the busi­ness plan of any com­pa­ny you’re work­ing for. Its final exit strat­e­gy, its end game, is, ​“Oh, even though we’re not going to real­ly make mon­ey from this or that or the oth­er, we’re going to make mon­ey because of all this data.” These are real­ly rich data— If everybody’s exit strat­e­gy is data… Data doesn’t just become a com­mod­i­ty. Data becomes…cheap. Everyone’s got data.

And data…no mat­ter what we think of data, data just makes up one lit­tle part of the total ad spend, mar­ket­ing spend, brand­ing spend, mar­ket research spend, of cor­po­rate America. And the ad spend, the total­i­ty of mar­ket­ing, brand­ing, mar­ket research, has real­ly nev­er ever got­ten above three or four per­cent of GDP. It just can’t. It’s stayed almost con­stant for…centuries. And the rea­son it does is because there’s kind of a lim­it to how much adver­tis­ing you can have that doesn’t have… You need some­one to actu­al­ly adver­tise.

If they want me to write a book for free, because it’s going to get me a talk, that they want me to do for free, because it’s going to get me a con­sult, that they want me to do for free, because it’s going to get me an arti­cle they want me to write for free, because it’s going to get me a book… What the fuck, right?

I mean, you’re all in that one, right? Oh, it’s going to be good for your resume. Oh, put it on LinkedIn. Oh, it’s all good. We’re work­ing for free to adver­tise our­selves cre­at­ing things that are based on adver­tis­ing. In the end, some­one has to make the shoes, or the bananas, or the things that are going to be adver­tised in all these places, and there’s not actu­al­ly enough. We are in a data bub­ble right now.

So, the unac­knowl­edged oper­at­ing sys­tem of extrac­tive growth-based cor­po­rate cap­i­tal­ism is embed­ded not just in the under­ly­ing oper­at­ing sys­tem, but it’s embed­ded in the design. In the UI, UX, the whole…whatever words you want to use for it. In the artistry of what you’re doing.

You know, the idea of cre­at­ing social con­nec­tions between peo­ple? We don’t cre­ate social con­nec­tions between peo­ple. We cre­ate affin­i­ty groups for peo­ple. The idea of some­how help­ing there be sol­i­dar­i­ty between peo­ple? The only way you get sol­i­dar­i­ty, ulti­mat­ly, is in the flesh. That’s where sol­i­dar­i­ty hap­pens. In the real world. But our designs are biased towards keep­ing peo­ple on the screen, not in the flesh. The minute they’re in the flesh, actu­al­ly relat­ing to each oth­er, the com­pa­ny that you’re design­ing for is los­ing mon­ey. The more time peo­ple spend actu­al­ly with each oth­er, not buy­ing or sell­ing, the worst that is for busi­ness. You’re nev­er going to make an app that’s going to be designed to get peo­ple free of the app.

So opti­mize, yes. But instead of opti­miz­ing for the extrac­tion of val­ue and its con­ver­sion into share price, we have to opti­mize our plat­forms for the veloc­i­ty of exchange. That’s the whole thing. It’s for the veloc­i­ty of exchange. The eas­i­est mantra I would say is ​“make them rich.” If you make your users rich, they will like your ser­vice and come back. But again, this is only if you want to make like, a fam­i­ly busi­ness. In oth­er words, this is to cre­ate a busi­ness or a com­pa­ny that will actu­al­ly func­tion in the tra­di­tion­al way. That will make mon­ey. Which I still think is pos­si­ble. You can make mon­ey by actu­al­ly hav­ing a com­pa­ny that makes mon­ey in an ongo­ing, sus­tain­able way. And you can argue for that.

It’s hard, policy-wise. We have a tax code that favors cap­i­tal gains and pun­ish­es div­i­dends, pun­ish­es rev­enue, pun­ish­es pay­roll. If you want to talk about pol­i­cy, yeah, let’s work on rent con­trol so that they can’t evict us from apart­ments. Let’s work on flip­ping the tax code. There are ways to do that. When you’re work­ing at a big com­pa­ny, though, it’s very hard to tell them, ​“Oh, I think you should opti­mize for the veloc­i­ty of exchange rather than the extrac­tion of cap­i­tal.” No, but what you can do is pitch to them lit­tle exper­i­ments, pro­to­types, of things that teach the com­pa­ny that there’s oth­er ways of doing busi­ness. Frame it as pub­lic rela­tions.

So, I went to a bank and I told them, ​“What you should do is, instead of giv­ing a hun­dred thou­sand dol­lars to a pizze­ria that wants to expand, give them fifty thou­sand dol­lars and an app that helps them raise fifty thou­sand dol­lars from the com­mu­ni­ty for the oth­er half.” And that way the bank can be seen as some­thing oth­er than just the extrac­tor of val­ue, and more as the facil­i­ta­tor of local eco­nom­ic rede­vel­op­ment. And of course, as a mod­el, it works, because now the pizze­ria can pay peo­ple say, they take a hun­dred dol­lars and give them a hun­dred and twen­ty dol­lars of piz­za over the next year. So peo­ple get a 20% return, the pizze­ria gets to pay in piz­za, peo­ple are invest­ing in their town, they’re see­ing their invest­ment make their main street bet­ter, make their prop­er­ty val­ues go up. Rather than just invest­ing in a long-distance crazy pollution-making fac­to­ry.

And that’s just one. You know, Chobani’s giv­ing 10% of its pre-IPO shares to its employ­ees. If Uber did the same thing, then its dri­vers would no longer be doing R&D for a robot­ic cars that replace them. They’d be doing R&D for the robot­ic cars that they own. It’s so sim­ple. YouTube: give half the mon­ey, give 3⁄4 of the mon­ey, to the peo­ple— Create a mod­el where your video­g­ra­phers can actu­al­ly stay alive if they have suc­cess­ful videos, rather than just be like a rock musi­cians that give all their mon­ey to the gui­tar cen­ter rather than hav­ing any­thing to live on.

It’s mak­ing them rich. It’s real­iz­ing that your user is not a con­sumer. Your user is a pro­duc­er. Your user is a val­ue cre­ator. This is what the dig­i­tal age means. These are the dig­its. [holds hands up, fin­gers spread] We think of the dig­i­tal age as this thing that made things more abstract. No, the dig­i­tal age brought it right back to the fin­gers. It makes it dis­crete. These are the dig­its. The dig­i­tal age is about mak­ing stuff. That’s why we see the retrieval of the craft men­tal­i­ty, the retrieval of all these Medieval ideas and ideals. It’s not coin­ci­dence. I mean, read your McLuhan. When there’s a media renais­sance, there’s a retrieval of the ideas that were repressed the last time out. So we do have Bitcoin. We have peer-to-peer. We have Burning Man. We have craft beers. We have arti­sanal yams and all these things they’re teas­ing us for.

But they’re actu­al­ly answers. This is not silli­ness. However they want to frame it, it’s not. It’s peo­ple actu­al­ly mak­ing stuff, cre­at­ing val­ue, and exchang­ing it. And that’s con­so­nant with dig­i­tal tech­nol­o­gy. It’s not anti­thet­i­cal to dig­i­tal. It’s anti­thet­i­cal to an indus­tri­al dig­i­tal econ­o­my. But it is not anti­thet­i­cal to dig­i­tal. Digital is dis­trib­uted net­worked activ­i­ty where val­ue can be cre­at­ed from the periph­ery and exchanged through­out the net­work. And as long as you’re think­ing of your job as that of retriev­ing those val­ues and enabling val­ue exchange, of mak­ing users rich, let­ting them cre­ate and exchange val­ue, rather than try­ing to exter­nal­ize every­thing onto those humans and on to that plan­et where they live, you’ll stand a chance, I think, of arrest­ing the devel­op­ment of this extrac­tive, sui­ci­dal indus­tri­al machine.

And I do have hope that we can do that. So thanks. Carry on. Do good things. And I’ll see you in piz­za, right? Thanks.